Monetary Policy Insights - The central bank has announced an increase in structural monetary policy tools while indicating that there is still room for both reserve requirement ratio (RRR) cuts and interest rate reductions, maintaining a cautious approach towards broad monetary easing [2] - Structural interest rate cuts are aimed at reducing costs for banks and creating conditions for future policy rate reductions, with a potential RRR cut expected in the first quarter [2][3] Financial Data Overview - In December, the year-on-year growth of M1 continued to decline, while M2 growth rebounded, primarily due to increased fiscal spending at year-end and a shift of government deposits to residents and enterprises [2][9] - Social financing in December showed a decrease of 646.2 billion yuan year-on-year, with government bonds being the main drag on this decline [6] Loan Dynamics - December saw a total of 9.1 trillion yuan in new RMB loans, with improvements mainly from the corporate sector, while the residential sector continued to show weakness with a reduction of 916 billion yuan in loans [8] - The corporate sector's loans increased by 1.1 trillion yuan, with short-term loans rising by 370 billion yuan and medium to long-term loans increasing by 330 billion yuan [8] Structural Policy Adjustments - The central bank has implemented a series of structural monetary policy adjustments, including a 0.25% reduction in various structural monetary policy tool rates and an increase in specific loan quotas for agriculture, small enterprises, and technological innovation [3] - A new 1 trillion yuan loan quota has been established for private enterprises, along with expanded support for carbon reduction and service consumption [3] Deposit Trends - In December, M2 year-on-year growth rebounded to 8.5%, with a notable increase in household deposits by 2.6 trillion yuan, while corporate deposits saw a rise of 1.2 trillion yuan [9] - The gap between M2 and M1 growth rates widened to 4.7%, indicating a decrease in the liquidity of funds [9]

Core Viewpoint - The bond market showed slight strengthening with most interbank bond yields declining by around 1 basis point, while the central bank's net injection was 169.4 billion yuan, leading to a general decrease in funding rates. The market is expected to remain volatile in the short term, with a continued need for a loose monetary environment into 2026, and potential for flexible use of interest rate cuts and reserve requirement ratio reductions [1][6]. Market Performance - The closing prices for government bond futures showed an increase for most contracts, with the 10-year main contract rising by 0.11% to 108.035. The yields for various government bonds also decreased, with the 10-year government bond yield down by 0.95 basis points to 1.8475% [2]. - The China Convertible Bond Index rose by 0.20% to 516.90 points, with a trading volume of 90.616 billion yuan. Notable gainers included Jin 05 Convertible Bond and Guo Wei Convertible Bond, which increased by 20.00% and 15.15%, respectively [2]. International Bond Market - In North America, U.S. Treasury yields fell across the board, with the 10-year yield down by 4.33 basis points to 4.132%. Similar downward trends were observed in the Asian and Eurozone markets, with Japanese and European bond yields also declining [3][4]. Primary Market - The China Development Bank's 3-year and 7-year financial bonds had winning yields of 1.6675% and 1.9086%, respectively, with bid-to-cover ratios of 3.03 and 4.11. The Export-Import Bank's financial bonds had winning yields of 1.4387% and 1.7481%, with bid-to-cover ratios of 2.63 and 6.39 [5]. Funding Conditions - The central bank conducted a 179.3 billion yuan reverse repurchase operation at a fixed rate of 1.40%, resulting in a net injection of 169.4 billion yuan for the day. Additionally, a 900 billion yuan 6-month buyout reverse repurchase operation was carried out, marking the fifth consecutive month of increased operations [6]. - The Shibor rates for various tenors showed a collective decline, with the overnight rate down by 1.6 basis points to 1.374% [6]. Institutional Perspectives - Institutions highlighted the necessity of loose monetary policy to address the structural issues in the economy, emphasizing the need for counter-cyclical tools to facilitate asset balance sheet recovery. The central bank's actions are seen as supportive of government bond issuance and encouraging financial institutions to increase credit supply [8].

1. Report Industry Investment Rating No relevant content provided. 2. Core Views of the Report - In December 2025, exports exceeded expectations despite the high - base effect, with full - year 2025 exports growing 5.5% year - on - year (5.8% in 2024). In 2026, exports may maintain some resilience due to improved external demand and eased Sino - US tariff frictions. The industrialization process of emerging countries may also contribute to exports [2][8]. - Recently, the view of long - term bonds oscillating weakly is maintained. The yields of 10Y and 30Y treasury bonds are expected to adjust to around 1.9% and 2.4% respectively. The probability of broad - based monetary policy is expected to decline, and the opportunity for a staged recovery may come later in the first quarter [2][8]. 3. Summary by Related Content 3.1 Event Description - In December 2025, imports and exports exceeded expectations, and the trade surplus remained at a high level. In US dollar terms, the year - on - year growth rate of total imports and exports rebounded by 1.9 pct to 6.2%, reaching $601.4 billion. The trade surplus increased by $2.5 billion to $114.1 billion month - on - month. The year - on - year growth rates of exports and imports rebounded by 0.7 and 3.8 pct to 6.6% and 5.7% respectively [6]. - Month - on - month, both exports and imports were stronger than the seasonal average. In December, the month - on - month growth rate of exports rebounded by 0.2 pct to 8.4%, at a relatively high level in the same period of previous years; the month - on - month growth rate of imports rebounded significantly by 9.9 pct to 11.5%, much better than in previous years [6]. 3.2 Reasons for Export Growth - The contribution of high - end manufacturing products continued to strengthen, especially automobiles and integrated circuits. Hong Kong, China became an important marginal contributor to exports in December. The price support for chemical raw material exports remained [8]. 3.3 Export Performance by Product - Products with high export growth rates were concentrated in chemical raw materials and high - end manufacturing products. The year - on - year growth rates of exports of automobiles, integrated circuits, ships, and liquid crystal panels increased by 19, 14, - 21, and - 1 pct to 72%, 48%, 25%, and 16% respectively compared with the previous month. Some chemical materials such as refined oil and rare earths had year - on - year growth rates that increased by 43 and 18 pct to 42% and 53% respectively. Labor - intensive products such as shoes, toys, household appliances, and clothing and bags continued to have negative year - on - year growth [8]. - In terms of volume - price analysis, the volume and price of traditional export products such as ceramics, bags, and household appliances continued to decline, while chemical raw materials and high - end machinery had price resilience. The year - on - year growth rate of automobile sales increased by 25 pct to 74%, mobile phones had a 15% year - on - year price increase while the volume only decreased by 4% year - on - year [8]. 3.4 Export Performance by Destination - Hong Kong, China and ASEAN had prominent pulling effects, while the pulling effects of Latin America and Africa weakened, and the weight of exports to the US continued to decline. In terms of the pulling rate, the pulling rates of Hong Kong, China and ASEAN on exports increased by 1.4 and 0.6 pct to 3.1% and 2.1% respectively compared with the previous month, while the pulling rates of Latin America, the EU, and Africa decreased by 0.5, 0.4, and 0.3 pct respectively. Month - on - month, the month - on - month growth rate of exports to ASEAN increased by 5.2 pct to 14.2%, while the month - on - month growth rate of exports to Latin America decreased by 10.6 pct to - 1.9%. The weight of exports to the US further declined, and the year - on - year growth rate continued to fall, dropping by about 1.4 pct to - 30% compared with the previous month [8]. 3.5 Import Performance - Imports rebounded significantly, with good performance in commodities. High - tech products (13%) and mechanical and electrical products (9%) continued to recover. In terms of commodities, imports of crude oil, iron ore, and copper ore increased by 5%, 10%, and 33% year - on - year respectively. Imports of steel, refined oil, and coal decreased slightly, while rare earth imports increased by 102% year - on - year, with volume and price increasing by 3% and 96% year - on - year respectively. Among key high - end manufacturing products, imports of automobiles and liquid crystal panels continued to decline, while imports of automatic data processing equipment (18%) and integrated circuits (17%) increased significantly, and the year - on - year growth rate of medical device imports turned positive (5%) [8].

Group 1 - The core viewpoint of the report is that a continued loose monetary policy is necessary to address the contradictions in the asset-liability balance of the real economy's three sectors, requiring counter-cyclical tools for intervention [1] - The report highlights that issues such as the inefficiency of financial intermediaries cannot be resolved spontaneously, indicating a need for ongoing monetary support [1] - It emphasizes that the changes in the banking system's asset structure and the misalignment with interest rate cuts necessitate a flexible approach to monetary policy, including potential interest rate and reserve requirement ratio reductions [1] Group 2 - The report suggests that the loose monetary environment is expected to persist until 2026, indicating a high necessity for the central bank and commercial banks to continue expanding their balance sheets [1]

Group 1: Inflation Overview - The overall CPI for December 2025 in the U.S. was +0.31%, in line with expectations, while core CPI was +0.24%, below the expected +0.30%[3] - Year-on-year CPI increased by 2.68%, matching expectations, while core CPI rose by 2.64%, slightly below the expected 2.70%[3] - The weaker-than-expected core CPI was primarily influenced by declines in used car prices, a price war among telecom companies, and seasonal factors, which are expected to have a short-term impact[3] Group 2: Economic Projections - For Q1 2026, there are upward risks to U.S. non-farm payroll and inflation data due to fiscal and monetary impulses, as well as seasonal factors[2] - The fiscal impulse for Q1 2026 is estimated to boost U.S. GDP by 2.79%, largely due to the end of government shutdowns[2] - Cumulative interest rate cuts of 75 basis points since September 2025 are expected to stimulate the economy in Q1 2026[2] Group 3: Market Reactions - Following the release of the weaker core CPI, market expectations for interest rate cuts increased, leading to rises in U.S. stocks and gold, while U.S. Treasury yields and the dollar index fell[3] - However, asset prices later partially retraced the volatility caused by the monetary easing trades[3] Group 4: Risk Factors - Potential risks include unexpected policy actions from Trump, excessive interest rate cuts by the Federal Reserve leading to inflation rebound, and prolonged high interest rates causing liquidity crises in the financial system[4]

Report Industry Investment Rating - Not provided in the content Core Viewpoints of the Report - The bond market fluctuates between stable growth and easing expectations, and short - term attention should be paid to policy signals at the end of the month. The stock market drives the market, the Political Bureau Meeting releases a loose monetary signal, the LPR remains unchanged, and the Fed's interest rate cut expectation continues while the uncertainty of global trade increases the uncertainty of foreign capital inflows. [1][3] Summary by Relevant Catalogs I. Interest Rate Pricing Tracking Indicators - Price indicators: China's monthly CPI has a month - on - month decrease of 0.10% and a year - on - year increase of 0.70%; China's monthly PPI has a month - on - month increase of 0.10% and a year - on - year decrease of 2.20% [9] - Monthly economic indicators: Social financing scale is 440.07 trillion yuan, with a month - on - month increase of 2.35 trillion yuan and a growth rate of 0.54%; M2 year - on - year is 8.00%, with a month - on - month decrease of 0.20% and a decline rate of 2.44%; Manufacturing PMI is 50.10%, with a month - on - month increase of 0.90% and a growth rate of 1.83% [10] - Daily economic indicators: The US dollar index is 98.86, with a day - on - day increase of 0.12 and a growth rate of 0.12%; The US dollar against the offshore RMB is 6.9813, with a day - on - day decrease of 0.002 and a decline rate of 0.02%; SHIBOR 7 - day is 1.46, with a day - on - day increase of 0.01 and a growth rate of 0.83%; DR007 is 1.47, with a day - on - day increase of 0.01 and a growth rate of 0.79%; R007 is 1.51, with a day - on - day increase of 0.00 and a decline rate of 0.31%; The 3 - month interbank certificate of deposit (AAA) is 1.60, with a day - on - day decrease of 0.01 and a decline rate of 0.49%; The AA - AAA credit spread (1Y) is 0.09, with a day - on - day increase of 0.00 and a decline rate of 0.49% [10] II. Overview of the Treasury Bond and Treasury Bond Futures Market - Multiple charts are provided, including the closing price trend of the main continuous contract of treasury bond futures, the price change rate of each variety of treasury bond futures, the precipitation fund trend of each variety of treasury bond futures, the position ratio of each variety of treasury bond futures, the net position ratio of the top 20 in each variety of treasury bond futures, the long - short position ratio of the top 20 in each variety of treasury bond futures, the spread between China Development Bank bonds and treasury bonds, and the issuance of treasury bonds [11][15][18][21] III. Overview of the Money Market Liquidity - Multiple charts are provided, including the Shibor interest rate trend, the maturity yield trend of inter - bank certificates of deposit (AAA), the trading statistics of inter - bank pledged repurchase, and the local government bond issuance [28][33] IV. Spread Overview - Multiple charts are provided, showing the inter - term spread trend of each variety of treasury bond futures and the term spread of spot bonds and cross - variety spreads of futures [32][37][39] V. Two - Year Treasury Bond Futures - Multiple charts are provided, including the implied interest rate and the maturity yield of the main contract of two - year treasury bond futures, the IRR of the TS main contract and the fund interest rate, the three - year basis trend of the TS main contract, and the three - year net basis trend of the TS main contract [41][46][50] VI. Five - Year Treasury Bond Futures - Multiple charts are provided, including the implied interest rate and the maturity yield of the main contract of five - year treasury bond futures, the IRR of the TF main contract and the fund interest rate, the three - year basis trend of the TF main contract, and the three - year net basis trend of the TF main contract [51][54] VII. Ten - Year Treasury Bond Futures - Multiple charts are provided, including the implied yield and the maturity yield of the main contract of ten - year treasury bond futures, the IRR of the T main contract and the fund interest rate, the three - year basis trend of the T main contract, and the three - year net basis trend of the T main contract [55][56] VIII. Thirty - Year Treasury Bond Futures - Multiple charts are provided, including the implied yield and the maturity yield of the main contract of thirty - year treasury bond futures, the IRR of the TL main contract and the fund interest rate, the three - year basis trend of the TL main contract, and the three - year net basis trend of the TL main contract [61][62] Strategy - Unilateral: Repurchase rates decline, and treasury bond futures prices fluctuate [4] - Arbitrage: Pay attention to the decline of the 2603 basis [4] - Hedging: There is a medium - term adjustment pressure, and short - sellers can use far - month contracts for appropriate hedging [4]

Report Industry Investment Rating No relevant information provided. Core View The bond market is oscillating between the expectations of stabilizing growth and policy easing. The stock market rally, the broad - money signal released by the Politburo meeting, the stable LPR, the continued expectation of Fed rate cuts, and increased global trade uncertainty have all influenced the bond market. In the short term, attention should be paid to the policy signals at the end of the month [1][2][3]. Summary by Directory I. Interest Rate Pricing Tracking Indicators - China's CPI (monthly) had a -0.10% month - on - month change and a 0.70% year - on - year increase; PPI (monthly) had a 0.10% month - on - month change and a -2.20% year - on - year decrease [9]. - Social financing scale was 440.07 trillion yuan, with a month - on - month increase of 2.35 trillion yuan (+0.54%); M2 year - on - year was 8.00%, down 0.20% (-2.44%); Manufacturing PMI was 50.10%, up 0.90% (+1.83%) [10]. - The US dollar index was 98.74, up 0.14 (+0.14%); USD/CNY (off - shore) was 6.9844, up 0.008 (+0.12%); SHIBOR 7 - day was 1.45, up 0.03 (+1.97%); DR007 was 1.46, up 0.03 (+2.09%); R007 was 1.51, with no change (-0.31%); AAA - rated 3 - month inter - bank certificates of deposit were 1.60, up 0.01 (+0.34%); 1 - year AA - AAA credit spread was 0.09, up 0.00 (+0.34%) [10]. II. Overview of the Treasury and Treasury Futures Market No specific text - based summary information provided, only references to figures such as the closing price trend of Treasury futures' main continuous contracts, the price change rates of various Treasury futures varieties, etc. [12][19][23]. III. Overview of the Money Market Liquidity No specific text - based summary information provided, only references to figures like the trading statistics of inter - bank pledged repurchase and local government bond issuance [26][31]. IV. Spread Overview No specific text - based summary information provided, only references to figures such as the term spread of spot bonds and the cross - variety spread of futures [35][42]. V. Two - Year Treasury Futures No specific text - based summary information provided, only references to figures like the implied interest rate of the two - year Treasury futures' main contract and the Treasury bond's maturity yield [39][44]. VI. Five - Year Treasury Futures No specific text - based summary information provided, only references to figures like the implied interest rate of the five - year Treasury futures' main contract and the Treasury bond's maturity yield [48][52]. VII. Ten - Year Treasury Futures No specific text - based summary information provided, only references to figures like the implied yield of the ten - year Treasury futures' main contract and the Treasury bond's maturity yield [53][58]. VIII. Thirty - Year Treasury Futures No specific text - based summary information provided, only references to figures like the implied yield of the thirty - year Treasury futures' main contract and the Treasury bond's maturity yield [59][65]. Strategy - **Unilateral**: With the decline of repurchase rates, the prices of Treasury futures are oscillating [4]. - **Arbitrage**: Pay attention to the decline of the 2603 basis [4]. - **Hedging**: There is medium - term adjustment pressure, and short positions can use far - month contracts for appropriate hedging [4].

Report Industry Investment Rating No information provided in the content. Core Viewpoints - The state of the fundamental and capital markets determines the underlying tone of the bond market. The focus of the game remains the intensification of "loose monetary policy" and its specific implementation forms. In January 2026, the situation is neutral to optimistic. The primary issuance pressure of government bonds is controllable. The regulatory scale for non-banks is marginally relaxed, which is beneficial for the stability of the liabilities of public bond funds. The capital market may face potential seasonal pressure, but there is a high probability of additional central bank injections. The allocation demand at the beginning of the year can lock in the upper limit of interest rates. The coupons and spreads of the medium and long - term ends of interest - rate bonds are highly cost - effective, and the bond market may start a bullish trend [2][29][61]. Summary by Directory 1. December Bond Market: A Glimmer of Warmth Amidst the Cold - In December, the long - end interest rate showed an "up - down - up" N - shaped trend. The 10 - year Treasury yield reached a high of 1.87% at the beginning of the month and a second - high of 1.86% at the end of the month, and dropped to 1.83% in the middle of the month. The bond market mainly traded on four themes: the central government's policy orientation for the following year, the possibility of short - term intensification of the central bank's "loose monetary policy", the supply ratio of ultra - long government bonds, and the year - end ranking competition among institutions [1][13]. - Compared with October - November, in December, the capital interest rate was more stable and lower, and the bond market sentiment became more positive, shifting from completely ignoring the possibility of "loose monetary policy" to attempting to play the game [17]. - Regarding various bond market varieties, the issuance price of inter - bank certificates of deposit (NCDs) increased at the beginning of the month and decreased in the second half of the month. The interest - rate bond curve steepened significantly, with the yield of 30 - year Treasury bonds rising by 8bp. The credit bond market's development slowed down marginally, and only some over - adjusted varieties in November had a rebound [23][24]. 2. Learning from History: Fundamental and Capital Markets as Key References for the Bond Market in Early January - In the past five years, the movement of long - end interest rates in January has been inconsistent. When the economic fundamentals were good at the beginning of the year and the capital market gradually tightened, bond yields increased, as seen in 2021, 2023, and 2025. When the fundamental data was below expectations and the monetary policy was proactive, it was beneficial for the bond market, as in 2022 and 2024 [27]. - Looking forward to January 2026, in addition to the fundamental and capital market conditions, non - seasonal pricing factors also need to be considered, including the supply rhythm of government bonds, regulatory changes in bond fund redemption fees, policy directions, and institutional behaviors [29]. 3. Four Key Concerns for the Bond Market in January Supply Rhythm - The net supply pressure of government bonds in January is about 1.3 trillion yuan. The net financing scale of government bonds in the first quarter is about 4.00 - 4.12 trillion yuan, with a "V" - shaped monthly distribution [3][36]. - The sentiment towards ultra - long - term bonds may be cautious in the first half of January and may recover in the second half as bond issuance progresses. The specific term structure of government bond supply in the first quarter still needs observation [37]. Regulatory Changes - The constraints on bond fund redemption fees have been relaxed. The new regulations may have three regulatory intentions: stabilizing market pricing, weakening the liquidity management attribute of bond funds, and emphasizing fairness to investors. The issue of customized bond funds may continue to be the focus of rectification [4][41]. - After the new regulations were officially announced, the concerns of investors eased. In early January 2026, the bond market may achieve a good start, with interest - rate pricing potentially self - repairing and the possibility of an inflow of institutional incremental funds [41]. Policy Direction - In January, the capital market faces more disturbances than in December, including large - scale tax payments, Spring Festival cash - withdrawal demand, a credit boom, and proactive fiscal policies. The capital interest rate has an inherent upward momentum, and the inter - bank market's dependence on central bank injections will increase [6][42]. - There are two options for the central bank's monetary policy: "strong action" (possibly a reserve requirement ratio cut if the Q4 economic performance is significantly below expectations) and "weak action" (increasing the net injection of basic tools if the December data rebounds and the recovery continues into January) [48][49]. Institutional Behavior - Allocation - driven investors may be the key force in determining interest - rate pricing at the beginning of 2026. Banks and insurance companies' self - operated investments are evaluated annually, and the beginning of the year is an important allocation period. At present, the trading - driven investors' influence on the interest - rate center has weakened and they tend to follow the allocation - driven investors [7][51]. - For insurance companies, a 30 - year Treasury yield of 2.30% may be an important allocation point. For large banks, a 1.85% coupon rate on 7 - 10 - year Treasury bonds is acceptable when the spread is cost - effective [52][57]. 4. January Strategy: Seize the Opportunity - In general, the situation in January is neutral to optimistic. However, at the beginning of 2026, the bond market adjusted sharply. The direct reason may be the learning effect from the 2025 bond market adjustment, and the fundamental reason is the lack of significant profit - making effects in the bond market [61][62]. - The bond market is gradually entering a state where inter - bank market funds are relatively abundant and the duration of trading - type institutional portfolios is low. The coupons and spreads of the medium and long - term ends of interest - rate bonds are highly cost - effective. It is advisable to wait for allocation - driven investors to enter the market first, followed by trading - driven investors. In January, it may be a good time to seize opportunities. Short - term significantly adjusted varieties such as 5 - 10 - year Treasury bonds and 5 - 10 - year policy - bank bonds have trading value. When the 10 - year Treasury yield is above 1.85%, it may be a relatively safe replenishment window. For ultra - long - term bonds, it is advisable to wait until the end of the month when the supply term structure is clear [69][70].

1. Report's Industry Investment Rating No information provided. 2. Core Viewpoints of the Report - The stock - bond seesaw continues, and treasury bond futures close down across the board. The bond market oscillates between stable growth and easing expectations. In the short term, attention should be paid to the policy signals at the end of the month [1][3]. - The current fiscal policy aims to stabilize the aggregate, adjust the structure, and provide support. In the short term, it provides some support to the economy, but stronger impetus depends on the implementation of quasi - fiscal funds and next year's policy intensification [2]. - The financial data in November is generally weak. The follow - up stable growth still depends more on the monetary side [2]. 3. Summary by Relevant Catalogs I. Interest Rate Pricing Tracking Indicators - **Price indicators**: China's CPI (monthly) has a month - on - month decrease of 0.10% and a year - on - year increase of 0.70%; China's PPI (monthly) has a month - on - month increase of 0.10% and a year - on - year decrease of 2.20% [9]. - **Economic indicators (monthly update)**: The social financing scale is 440.07 trillion yuan, with a month - on - month increase of 2.35 trillion yuan and a growth rate of 0.54%; M2 year - on - year is 8.00%, with a decrease of 0.20% and a decline rate of 2.44%; the manufacturing PMI is 50.10%, with an increase of 0.90% and a growth rate of 1.83% [10]. - **Economic indicators (daily update)**: The US dollar index is 98.60, with a month - on - month increase of 0.27 and a growth rate of 0.27%; the US dollar against the offshore RMB is 6.9763, with a month - on - month increase of 0.000 and a growth rate of 0.01% etc. [10]. II. Overview of the Treasury Bond and Treasury Bond Futures Market - **Closing prices and price changes on January 6, 2026**: The closing prices of TS, TF, T, and TL are 102.37 yuan, 105.57 yuan, 107.70 yuan, and 110.93 yuan respectively, with price changes of - 0.05%, - 0.11%, - 0.13%, and - 0.31% respectively [3]. - **Net basis spreads**: The average net basis spreads of TS, TF, T, and TL are 0.048 yuan, - 0.026 yuan, 0.034 yuan, and - 0.055 yuan respectively [3]. III. Overview of the Money Market Liquidity - In November, the year - on - year growth of general public budget revenue slowed down due to the high base, but the annual revenue progress was still fast. The expenditure decline narrowed significantly, and the structure was more inclined to people's livelihood and investment. The government - funded revenue was still dragged down by the real estate market, but the accelerated issuance of special bonds drove the year - on - year increase in expenditure [2]. - The financial data in November was generally weak. Credit was still supported by bills and short - term loans, and the medium - and long - term financing needs of residents and enterprises continued to decline. The growth rate of social financing remained at 8.5%, mainly hedged by corporate bonds and off - balance - sheet financing [2]. - On January 6, 2026, the central bank conducted a 7 - day reverse repurchase operation of 1.62 billion yuan at a fixed interest rate of 1.4%. The main term repurchase rates 1D, 7D, 14D, and 1M are 1.263%, 1.422%, 1.465%, and 1.569% respectively, and the repurchase rates have recently declined [2]. IV. Spread Overview The report provides various spread data, such as the inter - period spread trends of treasury bond futures varieties, and the spread relationships between spot - bond term spreads and futures cross - variety spreads [28][34][40]. V. Two - Year Treasury Bond Futures The report shows data such as the implied interest rate of the two - year treasury bond futures main contract and the treasury bond maturity yield, the IRR of the TS main contract and the capital interest rate, and the three - year basis spread and net basis spread trends of the TS main contract [38][41][46]. VI. Five - Year Treasury Bond Futures It includes the implied interest rate of the five - year treasury bond futures main contract and the treasury bond maturity yield, the IRR of the TF main contract and the capital interest rate, and the three - year basis spread and net basis spread trends of the TF main contract [47][51]. VII. Ten - Year Treasury Bond Futures The report presents the implied yield of the ten - year treasury bond futures main contract and the treasury bond maturity yield, the IRR of the T main contract and the capital interest rate, and the three - year basis spread and net basis spread trends of the T main contract [52][53]. VIII. Thirty - Year Treasury Bond Futures It contains the implied yield of the thirty - year treasury bond futures main contract and the treasury bond maturity yield, the IRR of the TL main contract and the capital interest rate, and the three - year basis spread and net basis spread trends of the TL main contract [58][60]. 4. Strategies - **Unilateral strategy**: As repurchase rates decline, treasury bond futures prices oscillate [4]. - **Arbitrage strategy**: Pay attention to the decline of the 2603 basis spread [4]. - **Hedging strategy**: There is medium - term adjustment pressure. Short - sellers can use far - month contracts for appropriate hedging [4].

Report Industry Investment Rating No relevant content provided. Core Viewpoints - Affected by the stock market, the Political Bureau meeting signaled loose monetary policy, LPR remained unchanged, and the Fed's interest - rate cut expectation continued. With rising global trade uncertainty increasing the uncertainty of foreign capital inflows, the bond market oscillates between stable growth and loose expectations. Short - term attention should be paid to the policy signals at the end of the month [1][3]. - The current fiscal policy stabilizes the total amount, adjusts the structure, and provides support. In the short term, it supports the economy, but stronger impetus depends on the implementation of quasi - fiscal funds and next year's policy reinforcement. In the context of weakening demand and expected policy easing, subsequent stable growth relies more on monetary policy [2]. Summary by Directory 1. Interest Rate Pricing Tracking Indicators - Price indicators: China's CPI monthly环比 is - 0.10% and同比 is 0.70%; China's PPI monthly环比 is 0.10% and同比 is - 2.20% [9]. - Monthly economic indicators: Social financing scale is 440.07 trillion yuan, with a环比 increase of 2.35 trillion yuan and a环比 growth rate of 0.54%; M2同比 is 8.00%, down 0.20% from the previous period; Manufacturing PMI is 50.10%, up 0.90% from the previous period with a环比 growth rate of 1.83% [10]. - Daily economic indicators: The US dollar index is 98.33, down 0.11 with a环比 change rate of - 0.11%; The offshore US dollar - to - RMB exchange rate is 6.9760, up 0.005 with a环比 change rate of 0.07%; SHIBOR 7 - day is 1.42, down 0.01 with a环比 change rate of - 0.35%; DR007 is 1.43, up 0.00 with a环比 change rate of 0.18%; R007 is 1.51, up 0.00 with a环比 change rate of - 0.31%; The 3 - month yield of inter - bank certificates of deposit (AAA) is 1.58, up 0.06 with a环比 change rate of 3.61%; The AA - AAA credit spread (1Y) is 0.09, up 0.00 with a环比 change rate of 3.61% [11]. 2. Overview of the Treasury Bond and Treasury Bond Futures Market - On 2026 - 01 - 05, the closing prices of TS, TF, T, and TL were 102.41 yuan, 105.71 yuan, 107.86 yuan, and 111.32 yuan respectively, with price changes of - 0.03%, - 0.02%, 0.03%, and - 0.05% respectively [3]. - The average net basis of TS, TF, T, and TL were 0.015 yuan, - 0.037 yuan, 0.042 yuan, and - 0.025 yuan respectively [3]. 3. Overview of the Money Market Funding Situation - In November, the general public budget revenue slowed down year - on - year due to the high base, but the annual revenue progress was still fast. The expenditure decline narrowed significantly, with a more people - oriented and investment - in - people structure. Government - managed funds revenue was still dragged down by real estate, but the accelerated issuance of special bonds drove the expenditure to turn positive year - on - year, supporting the broad - based fiscal situation [2]. - In November, financial data was generally weak. Credit was still supported by bills and short - term loans, and the medium - and long - term financing demand of residents and enterprises continued to decline. The social financing growth rate remained at 8.5%, mainly hedged by corporate bonds and off - balance - sheet financing. M1 and M2 growth rates declined simultaneously, indicating weak economic vitality [2]. - On 2026 - 01 - 05, the central bank conducted 13.5 billion yuan of 7 - day reverse repurchase operations at a fixed interest rate of 1.4% [2]. - The main repurchase rates for 1D, 7D, 14D, and 1M were 1.264%, 1.423%, 1.457%, and 1.574% respectively, and the repurchase rates have recently declined [2]. 4. Spread Overview - There are various spread indicators such as the inter - period spread of treasury bond futures, the spread between spot bond term spreads and futures cross - variety spreads (e.g., 4*TS - T, 2*TS - TF, 2*TF - T, 3*T - TL, 2*TS - 3*TF + T) [29][34][36]. 5. Two - Year Treasury Bond Futures - There are indicators such as the implied interest rate of the two - year treasury bond futures main contract and the treasury bond yield to maturity, the IRR of the TS main contract and the funding rate, and the three - year basis and net basis trends of the TS main contract [38][41][45]. 6. Five - Year Treasury Bond Futures - There are indicators such as the implied interest rate of the five - year treasury bond futures main contract and the treasury bond yield to maturity, the IRR of the TF main contract and the funding rate, and the three - year basis and net basis trends of the TF main contract [46][53]. 7. Ten - Year Treasury Bond Futures - There are indicators such as the implied yield of the ten - year treasury bond futures main contract and the treasury bond yield to maturity, the IRR of the T main contract and the funding rate, and the three - year basis and net basis trends of the T main contract [54][55]. 8. Thirty - Year Treasury Bond Futures - There are indicators such as the implied yield of the thirty - year treasury bond futures main contract and the treasury bond yield to maturity, the IRR of the TL main contract and the funding rate, and the three - year basis and net basis trends of the TL main contract [60][62]. Strategies - Unilateral: With the decline of repurchase rates and the oscillation of treasury bond futures prices, the 2512 contract is neutral [4]. - Arbitrage: Pay attention to the decline of the 2512 basis [4]. - Hedging: There is medium - term adjustment pressure, and short - position holders can moderately hedge with far - month contracts [4].